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As the US South Korean naval exercise begins, North Korea deployed surface to surface missiles in the Yellow Sea, and also moved other missiles further south. The North Koreans have vowed that any trespassing of their borders, through land, air or sea, will meet a strong response.

And even without these latest movements, North Korea has a massive artillery array of 70,000 cannons pointed to Seoul – South Korea’s capital, which is very close to the border. A full utilization of this artillery could destroy Seoul withing hours. Hopefully this will never happen.

The BBC reports that China calls for emergency talks to resolve the tensions and that South Korean fire also hit the demilitarized zone, on land:

Yonhap also reported that South Korean troops on Sunday accidentally fired an artillery round into the Demilitarised Zone (DMZ) that divides the nations. Seoul quickly sent the North a message saying it was an accident, the news agency said.

Tensions between the Koreans raised global fears which aided the dollar. If the naval exercise ends without fresh fire, tensions will drop. The yen usually rides on global fears, as it’s considered a “safe haven” currency, but in this case, its proximity to the conflict makes the yen vulnerable to any sparks.

Still no confirmation about the rumored death of Kim Jong Il, North Korea’s leader.

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